Deb Bishop Health and Beauty Products has devel-oped a new shampoo, and you need to develop its aggregate sched-ule. The cost accounting department has supplied you the costs relevant to the aggregate plan, and the marketing department hasprovided a four-quarter forecast. All are shown as follows:QUARTER FORECAST1 1,4002 1,2003 1,5004 1,300COSTSPrevious quarter’s output 1,500 unitsBeginning inventory 0 unitsStockout cost for backorders $50 per unitInventory holding cost $10 per unit for every unit held atthe end of the quarterHiring workers $40 per unitLayoff workers $80 per unitUnit cost $30 per unitOvertime $15 extra per unitSubcontracting Not availableYour job is to develop an aggregate plan for the next four quarters.a) First, try hiring and layoffs (to meet the forecast) as necessary.b) Then try a plan that holds employment steady.c) Which is the more economical plan for Deb Bishop Healthand Beauty Products?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Deb Bishop Health and Beauty Products has devel-
oped a new shampoo, and you need to develop its aggregate sched-
ule. The cost accounting department has supplied you the costs
relevant to the aggregate plan, and the marketing department has
provided a four-quarter
QUARTER FORECAST
1 1,400
2 1,200
3 1,500
4 1,300
COSTS
Previous quarter’s output 1,500 units
Beginning inventory 0 units
Stockout cost for backorders $50 per unit
Inventory holding cost $10 per unit for every unit held at
the end of the quarter
Hiring workers $40 per unit
Layoff workers $80 per unit
Unit cost $30 per unit
Overtime $15 extra per unit
Subcontracting Not available
Your job is to develop an aggregate plan for the next four quarters.
a) First, try hiring and layoffs (to meet the forecast) as necessary.
b) Then try a plan that holds employment steady.
c) Which is the more economical plan for Deb Bishop Health
and Beauty Products?
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